Question

S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both produced in the company’s Louisville factory and go through identical assembly operations. The difference is in the quality (hence, cost) of the parts used. The following data are available for November, the latest month for which information is available:

	SL1			SL2			Total
Number assembled		2,000			2,500			4,500
Materials cost per tractor	$	1,600		$	2,100
Other costs:
Direct labor							$	1,900,000
Supplies								620,000
Other overhead								3,780,000

Required:

S. Lee Enterprises uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in November.

	SL1 SL2 Total Operation cost Materials cost Total cost Number of units Unit cost

Answer 1

S. Lee Enterprises uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in November.

	SL1 SL2 Total Operation cost 2800000 3500000 6300000 Materials cost 3200000 5250000 8450000 Total cost 6000000 8750000 14750000 Number of units 2000 2500 Unit Cost 3000 3500